Introduced by Representatives Dostis of Waterbury,
Cheney of Norwich, Copeland-Hanzas of Bradford, Edwards of Brattleboro, Flory
of Pittsford, Hube of Londonderry, Klein of East Montpelier, Krawczyk of Bennington, Masland of Thetford, Mitchell of Barnard, Nuovo of Middlebury, Sweaney of Windsor, Westman of Cambridge and Weston of Burlington

Referred to Committee on

Statement of purpose: This bill proposes to create a
business income tax credit for installation of solar energy equipment, and geothermal,
fuel cell, and microturbine property.

AN ACT RELATING TO SOLAR ENERGY BUSINESS INCOME TAX CREDIT

It is hereby enacted by the General Assembly of the State of
Vermont:

Sec. 1. 32 V.S.A. § 5822(c)(1)(B) and (d) are amended to
read:

(c) The
amount of tax determined under subsection (a) of this section shall be:

(1) increased
by 24 percent of the taxpayer's federal tax liability for the taxable year for
the following:

* * *

(B) recapture
of federal investment tax credit and increased by 76 percent of the Vermont-property
portion of the business energy credit component of the federal investment tax
credit recapture for the taxable year;

(d) A
taxpayer shall be entitled to a credit against the tax imposed under this
section of 24 percent of each of the credits allowed against the taxpayer's
federal income tax for the taxable year as follows: elderly and permanently
totally disabled credit, investment tax credit, and child care and dependent
care credits. A taxpayer shall also be entitled to a credit against the tax
imposed under this section of 76 percent of the Vermont-property portion of the
business energy credit component of the federal investment tax credit allowed
against the taxpayer’s federal income tax for the taxable year under Section 48
of the Internal Revenue Code.

Sec. 2. 32 V.S.A. § 5930z is
added to read:

§ 5930z. Pass-Through of Federal Energy Credit for

Corporations

(a) A
taxpayer of this state shall be eligible for a credit against the tax imposed
under section 5832 of this title in an amount equal to the

Vermont-property portion of the
business energy credit component of the federal
investment tax credit allowed against the taxpayer’s federal income tax for the
taxable year under Section 48 of the Internal Revenue Code, multiplied by the
taxpayer’s allocation factor for the taxable year as determined under section
5833 of this title.

(b) Any
taxpayer who has received a credit under subsection (a) of this section in any
prior year shall increase its corporate income tax under this chapter by the
amount of the Vermont-property portion of the business energy credit component
of the federal investment tax credit recapture for the taxable year, multiplied
by the taxpayer’s allocation factor for the original credit year, as determined
under section 5833 of this title.

Sec. 3. EFFECTIVE DATE

Secs. 1
and 2 of this act (business energy tax credits) shall apply to taxable years
2008 and after.